Panama’s Incumbents Turfed Out as Voters Express Their Disgust

(Bloomberg) -- A fervor of anti-establishment feeling in Panama saw the governing party on track to lose about half its seats in congress and its candidate finish fourth in the presidential election.

The ruling Panamenistas are on track to gain about 8 seats in the 71-member national assembly, down from 16 seats now, as voters in the May 5 elections expressed their anger over a series of graft scandals and the end of the nation’s economic boom.

A grassroots anti-corruption campaign with the twitter hashtag #NoALaReleeccion, or no to re-election, may have had an impact, with voters throwing out more than 20 of the 49 incumbents who had sought to retain their seats, according to a preliminary calculation by local newspaper La Prensa. The brother of President Juan Carlos Varela was among those who lost their seats.

The Panamenista’s candidate for president, Jose Blandon, came fourth, with 11 percent of the vote, little more than a quarter of Varela’s share of the vote five years ago. The likely winner, Texas-educated businessman Laurentino Cortizo, tapped voter anger over corruption scandals, and has pledged to overhaul the way public contracts are awarded, to cut graft, and revive the $60 billion economy which was, until recently, one of the world’s top performers.

“I didn’t get to power to steal, or repay favors to big economic and political groups,” he told supporters, after declaring victory on Sunday night. “In Panama, there won’t be anyone who’s untouchable.’’

The new president will be sworn in for a five-year term on July 1. The final official results of the presidential vote are scheduled to be published Thursday, with the candidate who finished second alleging irregularities and demanding scrutiny of every ballot paper.

The market reaction was muted, with the yield on the nation’s dollar bonds due 2036 fell 1 basis point. All the main candidates were viewed as likely to continue the nation’s business-friendly policies, according to former Finance Minister Frank de Lima.

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